Brexit and your commercial contracts five years on

Further reading from this practice: Blockchain and Irish Law. For Hugh's background and qualifications, see Hugh Phelan.

The United Kingdom left the European Union on 31 January 2020, and the transition period ended on 31 December 2020. Six years on, the legal architecture of UK-Ireland commercial relations is settled in its broad outlines, but a steady stream of detailed issues continues to arise in the contracts that Irish businesses still sign with UK counterparties — and there are more of these than most people realise.

This is a working note on what an Irish business should still be doing about its UK contracts in 2026. It is written for the in-house counsel, finance leader or business owner who has dealt with the headline Brexit issues and wants to know what is still moving.

The Trade and Cooperation Agreement: what it does and does not do

The EU-UK Trade and Cooperation Agreement (TCA), which took effect on 1 January 2021, is the principal framework governing the trading relationship between the EU and the UK. It provides for tariff-free and quota-free trade in goods that meet rules of origin, sets out a framework for services and digital trade, and creates institutional mechanisms — the Partnership Council and various specialised committees — for ongoing management of the relationship.

The TCA is a free-trade agreement, not a customs union. Customs declarations, VAT compliance and regulatory checks apply to goods moving between the EU and the UK in both directions. The Northern Ireland Protocol, replaced by the Windsor Framework in 2023, governs the special treatment of goods moving between Great Britain and Northern Ireland.

For commercial contracts, the TCA is largely irrelevant. The Agreement governs the public-international-law relationship between the EU and the UK; it does not create rights enforceable by private parties. Your commercial contract with a UK counterparty is governed by whatever law and jurisdiction clause you agreed, subject to the conflict-of-laws rules of the forum.

Jurisdiction clauses and the lapse of Brussels I Recast

The Brussels I Recast Regulation, which governs jurisdiction and enforcement of judgments within the EU, ceased to apply to the UK from the end of the transition period. The replacement, in theory, is the Hague Convention on Choice of Court Agreements 2005, which the UK acceded to in its own right with effect from 1 January 2021. The UK applied to join the Lugano Convention but the EU has declined to consent, so Lugano is not in force as between the UK and the EU.

The practical consequence for Irish contracts is that a jurisdiction clause specifying the English courts is honoured by the Irish courts under the 2005 Hague Convention if it is an exclusive jurisdiction clause for a defined commercial matter. A non-exclusive clause, or a clause in a consumer or employment contract, falls outside the Convention and is dealt with under Irish common-law rules on jurisdiction, which are less predictable.

The drafting recommendation, for any contract signed in 2026 that involves an Irish and a UK party, is to use an exclusive jurisdiction clause if the parties want predictability. The choice between Irish and English jurisdiction is a commercial one, but the form of the clause — exclusive — is the technical step that engages the Convention.

Enforcement of judgments

The recognition and enforcement of judgments between the UK and Ireland is the area where the post-Brexit position is most uncomfortable. Pre-Brexit, an Irish judgment was enforceable in the UK and a UK judgment in Ireland under Brussels I Recast, with an automatic recognition procedure. Post-Brexit, the procedure is more complex.

For judgments based on an exclusive jurisdiction clause within the 2005 Hague Convention, recognition and enforcement is automatic between contracting states. For other judgments, the Irish recognition position is governed by common-law rules, which require the judgment creditor to commence fresh proceedings in Ireland and to satisfy the Irish court that the foreign court had jurisdiction on Irish private-international-law principles. The procedure works but it is slower and more expensive than the previous regime.

The UK ratified the Hague Convention on the Recognition and Enforcement of Foreign Judgments 2019 in 2024, with the EU likely to ratify in due course. When both jurisdictions are parties, the procedure for civil and commercial judgments will improve substantially. For contracts being signed now, the cautious drafting choice is to specify a jurisdiction whose judgments are predictably enforceable in the other party's home jurisdiction.

Service of process and procedural cooperation

The Service Regulation, which governed cross-border service of documents within the EU, ceased to apply between the UK and Ireland from 1 January 2021. Service from Ireland on a UK defendant now proceeds under the Hague Service Convention 1965, which is slower and more formal. The practical impact is an additional six to twelve weeks on the commencement of cross-border proceedings, which CFOs and in-house counsel should factor into litigation planning.

The Evidence Regulation, which governed the taking of evidence between EU member states, similarly ceased to apply. Taking evidence in the UK for Irish proceedings, or in Ireland for UK proceedings, now proceeds under the Hague Evidence Convention 1970, with a similar increase in time and cost.

Data transfers and the adequacy decision

The European Commission issued an adequacy decision in respect of the UK in June 2021, with a sunset clause that has been extended to 2025. The adequacy decision permits transfers of personal data from the EU to the UK without further safeguards. The current renewed adequacy decision runs to 2031, subject to ongoing review.

For Irish businesses transferring personal data to UK counterparties, the adequacy decision is the foundation of the data transfer architecture. The decision can be revoked if UK data-protection law diverges significantly from EU standards. The CFO or general counsel of an Irish business with material UK data flows should monitor the European Commission's review process and should maintain a fallback — standard contractual clauses with transfer impact assessment — that can be activated if adequacy is withdrawn.

For a broader treatment of Irish data-protection obligations, see data protection for the Irish business.

Goods, rules of origin and the VAT triangulation point

Trade in goods between Ireland and the UK now involves customs declarations, rules of origin claims and VAT reverse-charge procedures. The TCA provides tariff-free treatment for goods meeting rules of origin, but the documentary requirements are substantial and a small percentage of Irish exporters and importers continue to get them wrong.

The VAT triangulation arrangement that was previously available for Irish companies trading goods through the UK to other EU member states is no longer available, because the UK is no longer an EU member state. Irish companies that previously used the UK as a hub for European goods distribution have largely restructured those flows, but legacy contracts sometimes still reflect the old arrangement and should be reviewed.

Services and the financial-services equivalence question

The TCA provides limited liberalisation of services trade. Most regulated services — financial services, legal services, audit services, professional services — operate under national licensing regimes. Irish businesses providing services to UK counterparties must comply with UK regulatory requirements where applicable; UK businesses providing services to Irish counterparties must comply with Irish requirements.

The financial-services equivalence regime, which would have permitted Irish-authorised firms to provide services into the UK on the basis of EU equivalence and vice versa, has not been agreed in any meaningful form. The result is that cross-border financial services between Ireland and the UK now require, in most cases, dual authorisation. The number of Irish financial-services firms holding UK FCA authorisation, and vice versa, has increased substantially since 2021.

What to do now

For an Irish business with material UK exposure, the periodic review of Brexit-affected contracts should cover four areas. First, jurisdiction and choice-of-law clauses, to confirm that exclusive jurisdiction clauses are used where predictability matters. Second, dispute-resolution provisions, to ensure that the chosen forum's judgments can be enforced. Third, data-transfer clauses, to confirm that the current adequacy decision underpins the transfer and that a fallback is documented. Fourth, regulatory compliance, to confirm that any cross-border services are properly authorised on both sides.

For a related working note on cross-border conveyancing — the area of UK-Ireland practice where the post-Brexit changes have most directly affected the documentation — see cross-border conveyancing: Ireland and the UK. To book a notarial appointment with Hugh Phelan, call (021) 489-7134 or visit phelansolicitors.com.